The dominance theory of corporate power posits the idea that corporations make up the most dominant force in society. The theory states that the dominance of corporate power stems from the control corporations maintain on nearly every aspect of life, from the products they manufacture to the jobs they create, the resources they control and the political choices they influence.
The theory holds that the "corporate power elite" -- a group consisting of the top executives and directors of the largest corporations -- exercises dominance by maintaining direct control over vast resources. This group also decides on large-scale investment and employment questions that have a critical impact on the American economy. For example, a member of the corporate power elite could decide to shut down a manufacturing plant in Michigan and relocate it to Mexico to avoid paying union wages and health insurance to plant workers.
The dominance theory also includes the idea that corporate power is largely unchecked. Corporate decision-makers are not elected by voters or customers, but appointed by the corporation's board of directors. Politicians, judges and government agencies, many of which have the stated mission of curbing corporate power, can fall under the influence of corporate money and power. Small businesses that strive to compete with the "big boys" can find themselves targeted by restrictive regulations and oppressive lawsuits designed to shut them out.
Corporations derive their power from many sources to maintain and expand their dominance. Companies can make massive campaign contributions to politicians who they know will promote laws to benefit them and restrict competition. Corporations can file lawsuits against individuals or groups that attempt to uncover their unsavory practices. They can use the power of the media to discredit competitors, political opponents or anyone that disagrees with their agendas.
The dominance theory is not the only school of thought in analyzing corporate power structures. The pluralist theory maintains that laws, economic forces and consumer preferences act as counterbalances to unbridled corporate power. Pluralists believe that the diversity of the American consumer base, the variations in state and local laws and the wide range of media choices allow the population to hold corporate power to reasonable limits.